The large cotton merchants fulfill a very essential function in that they are responsible for the concentration of the raw material and for its redistribution into the proper channels of manufacture. They maintain branches and representatives throughout the entire cotton growing areas and are directly connected by wire with all the important exchanges. By far the bulk of their buying is done after the close of the New York Exchange from local and intermediate buyers who during the day have been acquiring mixed lots of all sorts. The merchant’s representative, known as the take-up man, goes over and classifies the cotton accumulated by the local buyers, takes a sample from each bale which he tags with a duplicate of the shipping tag he places on the bale itself, and then ships the cotton to the concentration point and the samples to the office at that place. He pays the local buyer by draft or check. [Sidenote: _Even-running Lots from Compress Point_] The office at the concentration point, usually where there is a compress, has in the meantime received instructions from the head office as to how to make up the various lots. As the bales are compressed they are collected into even-running lots of certain grades for which the head office has received inquiries from mills, and are shipped out in this way. The branch office will ship according to instructions forwarding the bills of lading with invoices and sight drafts to the head office or to some bank. [Sidenote: _Cooperative Marketing_] Since the war, and particularly in the last three years, the co-operative movement has in some sections developed to such an extent as to supplant in large part the old system of marketing. In Texas, Georgia, and other States, a large part of the crop is now concentrated, financed, and sold through these extensive organizations of growers either direct to mills, or to large merchants and exporters. Almost all cotton is bought on Middling Basis, but some is taken on sample with guarantees, (often a dangerous practice for both parties), and some is taken at a fixed price per bale. [Sidenote: _Direct Buying_] A few Southern mills buy direct from nearby growers, but the preponderant majority and practically all the Northern mills obtain their cotton through merchants, or through brokers representing Southern merchants. We have seen briefly how the cotton is grown and brought to market, but we have still to consider the all important question of what determines the price at which it changes hands. 6. THE COTTON EXCHANGES [Sidenote: _“Spot” and “Futures”_] [Sidenote: _The Great Markets_]